Who Will Regulate The Regulators?

Who Will Regulate the Regulators?

By Theresa Camoriano

When Congressman John Yarmuth spoke to the Lyndon Area Business Association, he said businesses could not be trusted to regulate themselves and needed to be regulated by the government. However, he did not say anything about who should be regulating the government regulators.
Private citizens, as consumers, have many ways to protect themselves against unscrupulous or incompetent private businesses in a free market. Consumers can and regularly do “vote with their wallets”, choosing to spend their money with businesses that do the best job of meeting their needs. As a result, the businesses that best meet consumers’ needs profit and grow, and those that do not do a good job eventually lose money and go out of business. There are many consumer reporting services like the Better Business Bureau and Consumer Reports and even consumer comments on the Internet, as well as word of mouth from friends to provide information
consumers can use in making their buying decisions. There also are laws that protect consumers against fraud and theft. These tools give consumers pretty good safeguards against private businesses in the free market.

Market forces, even when hampered by government, keep scammers in check. Reputation matters. Word gets out. Good companies thrive, and bad ones atrophy. Regulation barely deters the cheaters, but competition does. – John Stossel

However, there are not as many safeguards against unscrupulous or incompetent government, particularly at the federal level. If a local government is unscrupulous or incompetent, citizens can vote with their feet and move to another location. Similarly, they can and do move from one state to another to escape poorly run states. We have seen this happen in California, Michigan, and New York, where many of the most productive citizens have moved out. This competition among local governments and even state governments helps keep them responsive to their citizens. However, it is much more difficult to move out of the U.S. to another country that is more hospitable, so citizens have very little power to protect themselves against an unscrupulous or incompetent federal government. This concern is not new. In fact, it was very much on the minds of the founding fathers when they established the federal government. For example, in The Federalist Papers, it states:

But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.
– The Federalist #51

In order to protect the people from an overreaching federal government, the founding fathers established the Constitution, which gave congress only very limited, enumerated powers in order to keep most of the power closer to the people, and which separated powers into the three branches of government (executive, legislative, and judiciary), providing checks and balances between the various branches of government and between the states and the federal government. It was hoped that this would help preserve liberty. As Thomas Jefferson wrote,

In questions of power, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

Unfortunately, as predicted by Jefferson himself, the natural progress of things is for liberty to yield and government to gain ground.
And, indeed, over the years, that is exactly what has happened. A major shift in power occurred during Franklin Roosevelt’s presidency. The Supreme Court resisted Roosevelt’s attempted expansion of power for several years, striking down many pieces of
“New Deal” legislation as exceeding the powers granted to the federal government under the Constitution, but Roosevelt threatened to pack the court in order to get his way, and eventually the court backed off, allowing the “commerce clause” to be used as an escape mechanism to escape the limits of the enumerated powers.

Now, as John Yarmuth indicated in his talk before the Lyndon Area Business Association, the congress does pretty much anything it wants, by relying on the “commerce clause” and saying that everything affects interstate commerce. The “commerce clause” in Article 1, Section 8 of the Constitution gives congress the power:

regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.

The purpose of giving congress the power to regulate commerce among the states was to create a free trade zone or common market, so it would not be necessary to go through customs and pay duties in order to transport goods from one state to another.
This clause was not intended to provide an escape mechanism that would avoid the entire concept of limited, enumerated powers by saying that everything affects commerce and therefore everything can be regulated by congress. If that had been the intent, the founders would not have bothered to go to the trouble of making a list of limited, enumerated powers. Instead, they would simply have
given congress the power to regulate anything it wants. (It should be noted that the “general welfare” clause also has been used as an escape mechanism in a similar manner.)

Because the Supreme Court has allowed congress to use the “commerce clause” and the “general welfare” clause as escape mechanisms to unbind itself from the “chains of the Constitution”, there now are very few limits on the government regulators. As a result, the federal government has grown far too large, is overbearing, incompetent, and unscrupulous in many respects, has become much corrupt and too cozy with big business, and has proven to be the source of many of our current problems. For example, the federal government regulators who were supposed to protect us from unscrupulous mortgage lenders actually applied pressure to lenders to make shaky mortgage loans which resulted in the recent financial crisis.

“In reality, government agencies not only approved the more lax standards for
mortgage loan applicants, government officials were in fact the driving force
behind the loosening of mortgage loan requirements.” –Thomas Sowell

Even more recently, Nancy Pelosi, who has cast herself as the head of the regulators and the protector of the people against powerful business interests like insurance companies, quickly swore in a Congressman before he was even certified by his state in order to get a much needed vote in her Saturday night move toward greater government control of our health care. One might expect the chief of the squeaky clean government regulators to follow the rules rather than to blatantly ignore them and behave much more corruptly than the businesses she wants to regulate, but who is going to stop her?
[T]his “minor” issue of swearing in an uncertified candidate did not stop House Speaker Nancy Pelosi from installing Democrat Owens in the House right before the vote on “Obamacare”—which passed by the narrowest of margins. The Democratic Party is now steeped in the corruption of Chicago-style politics, and this is a perfect example of it. It makes no difference to Democrats if they used an unqualified person to help ram through their government-takeover of medicine. It’s just how they play the game. –CHQ

The proposed health care legislation itself is also very corrupt, since it leaves several large blanks to be filled in later on, after the legislation is passed.

• Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a “qualified plan” covers and how much you’ll be legally required to pay for it. That’s like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later. –Betsy McCaughey

Unfortunately, this is what we can expect when foxes are guarding the henhouse and there is nobody regulating the regulators. Congress now has slipped the “chains of the Constitution” and is running wild, doing pretty much anything it wants. The only power the people have to restrain it is to vote out the incumbents and replace them with new representatives who are more respectful of the people. However, a lot of damage can be done in the two years between elections. It also is very difficult for voters to know which candidates really intend to respect the Constitution, and the candidates very well may become corrupted once they are elected. For example, Owens, who was sworn in before he was certified, had promised the voters that he would vote against a “public option” health care plan and then promptly flipped and voted for it.

So what can citizens do to regulate the regulators?

The tea party movement and an upsurge in citizen involvement are very positive developments. We certainly need to elect better representatives and keep a closer eye on them. However, we also need to push back toward limiting the powers of Congress to those enumerated in the Constitution. Unfortunately, this cannot be done all at once and would have to be achieved incrementally.

One way to do that would be to create a pledge that candidates could take to promise that they will always vote in the direction of moving back toward the enumerated powers, so that, in areas in which the “general welfare” or “commerce” clauses have been
used to exceed the enumerated powers, they will only vote to shrink the role of the federal government, not to enlarge it. This would allow citizens to know which candidates are serious about respecting the Constitution so they could vote for those candidates and then hold them accountable to their pledges.

I have not seen such a pledge, and I realize it would be difficult to write and to police, but I think it would be well worth the effort.

See also:

Many corporations hopped on the global warming bandwagon because, as skeptic Sen. James Inhofe, R-Okla., puts it, “This is about profit, not Gaia” (the Greek earth goddess). When government regulation seems inevitable, some corporate decision-makers reckon it’s better to be at the table than on the menu. They seek, in Mr. Inhofe’s words, “greater competitive advantage through regulatory means.”-Orange County Register

Dodd and other believers in government’s omnipotence think regulators can know at all times what’s going on in the economy — and control it. They can’t. The economy is far too complex — and the temptations to corruption and greed far too great…. Perhaps Dodd expects us to forget his role in the 2007-09 financial fiasco — how he was part of Congress’ oversight of the banking system as he and others in the legislative branch accepted sweetheart loans from the very banks they were supposed to oversee. Well, we haven’t. Such incompetence and venality cost us trillions of dollars in bailouts, phony stimulus and TARP funding. Our financial system doesn’t need more oversight of this sort. -Investors Business Daily

Congressional Democratic leaders insist on a government health coverage option. But if it’s so great, why won’t they themselves be covered by it?… The Democratic Congress’ hypocrisy typifies the arrogance of professional politicians who like to dictate how others live, while shielding themselves from their own laws’ consequences. –Investors Business Daily

One of the few advantages to the country in having Congress overwhelmingly in the hands of one party is that the lack of need to compromise lets the leaders of that party reveal themselves for what they are– in this case, people with unbounded arrogance and utter contempt for the right of ordinary people to live their lives as they see fit, much less the right to know as citizens what laws are going to be passed by their government. The question is whether voters will remember on election day in 2010. –Thomas Sowell

There is no question that executive compensation requires scrutiny and supervision. The question is: Who should be doing it? [Boards of directors or government pay czars?]… the politics of envy won’t make anyone wealthier — and they could well make the country, not just a handful of highly compensated executives, a whole lot poorer. –Linda Chavez